Payment of final settlement
Wis. Stat. § 632.102
in effect(1) Withholding. An insurer shall withhold from payment a portion of the final settlement as determined under sub. (2), if all of the following apply:
(a) The amount of the final settlement exceeds 50 percent of the total of all limits under all insurance policies covering the building and any other structure affixed to land that sustained the loss.
(b) The total amount of all insurance covering the building and any other structure affixed to land that sustained the loss is at least $5,000.
(2) Amount withheld. The insurer shall withhold from payment of the final settlement an amount that is equal to the greater of the following:
(a) Twenty-five percent of the final settlement.
(b) The lesser of $7,500 or the limits under the policy for coverage of the building or other structure affixed to land that sustained the loss.
(3) Notice of withholding.
(a) Within 10 days after withholding the amount determined under sub. (2), the insurer shall deliver written notice of the withholding to all of the following persons:
1. The building inspection official of the 1st class city in which the insured real property is located.
2. The named insured.
3. Any mortgagee or other lienholder who has an existing lien against the insured real property and who is named in the policy.
4. If the final settlement was determined by judgment, the court in which the judgment was entered, in addition to the persons described in subds. 1. to 3.
(b) The notice of withholding shall include all of the following information:
1. The identity and address of the insurer.
2. The name and address of the named insured and each mortgagee or other lienholder entitled to notice under par. (a) 3.
3. The address of the insured real property.
4. The date of loss, policy number and claim number.
5. The amount of money withheld.
6. A summary of ss. 632.10 to 632.104, including a statement explaining all of the following:
a. That for the 1st class city to qualify for reimbursement of expenses from the funds withheld under this section, the 1st class city must, after the loss occurs but within 90 days after delivery of the notice of withholding under this subsection, commence proceedings under s. 66.0413, 254.595 or 823.04 or under a local ordinance relating to demolition or abatement of nuisances or obtain a release signed by the named insured consenting to demolition with respect to the building or other structure; that if the 1st class city commences the proceedings or obtains the release within that time period, a part or all of the withheld funds may be used to defray the 1st class city’s expenses; and that the withheld funds will be released to the named insured and other interests named in the policy if the 1st class city does not commence the proceedings or obtain the release within that time period.
b. That the withheld funds may be released to the named insured and other interests named in the policy if an official of the 1st class city determines under s. 632.103 (3) that the building or other structure has been repaired or replaced or the site restored to a dust-free and erosion-free condition.
(4) Insurer’s liability. In no event may an insurer be liable under a policy subject to ss. 632.10 to 632.104 for any amount greater than the lesser of the final settlement or the limits of liability set out in the policy.
(5) Immunity for insurer. No cause of action may arise against and no liability may be imposed upon an insurer or an agent or employee of an insurer for paying, withholding or transferring all or any portion of a final settlement as provided in ss. 632.10 to 632.104.
Source: WI Statutes (Official Site)URL: https://docs.legis.wisconsin.gov/document/statutes/632.102Fetched: 10/7/2026